S.C : Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the provisions of s. 147(a) are not attracted

Supreme Court Of India

CIT vs. Corporation Bank Ltd. Etc.

Section 147(a)

Asst. Year 1969-70

M. Srinivasan & Umesh C. Banerjee, JJ.

Civil Appeal Nos. 4584 to 4590 of 1990

3rd February, 1999

Counsel Appeared

B. Krishna Prasad, for the Appellant : Anil Kumar Jha, for the Respondents

ORDER

BY THE COURT :

The assessee, a banking company, had the assessment for the year ending on 31st Dec., 1968, completed on 4th Oct., 1969. Subsequently, however, the assessment was reopened under s. 147 (a) of the IT Act to bring to tax a sum of Rs. 54,485 in respect of interest suspense account. It is, however, according to the assessee, the sums representing interest on loans, recovery of which was considered doubtful. Incidentally be it noted that the assessee had disclosed this sum of Rs. 54,485 in the balance-sheet as unrealised amount of interest along with the return filed by it and the ITO had accepted the return and as a matter of fact had excluded that amount in the assessment order completed on 4th Oct., 1969.

2. The factual score depicts that in terms of a notice under s. 147(a) of the Act, the assessment was reopened and a sum of Rs. 54,485 was subjected to tax on the ground that interest accrued and due on the loans advanced by the banks was the income of the bank for the relevant assessment year and the assessee has failed to disclose this income in the return filed earlier. In the appeal against the reassessment order, the CIT(A) upheld the order of the ITO and on further appeal, the Tribunal, however, reversed the view of the CIT and held that the instructions of the CBDT contained in Circular dt. 6th Oct., 1952, would govern the case and the reopening was not justified and on a reference before the High Court under s. 256(1) of the IT Act, the High Court answered the reference in favour of the assessee upon recording its approval on to the order of the Tribunal.

3. Records depict that two questions were raised before the High Court namely:

“1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the provisions of s. 147(a) are not attracted.

2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the interest of Rs. 54,485 taken directly to the interest suspense account is not assessable to income-tax.”

So far as the second question is concerned, the High Court recorded that the matter need not be gone into by reason of Circular dt. 6th Oct., 1952, issued by the CBDT. Neither do we feel it necessary to go into the issue any further. Turning attention to the first question as regards the provisions under s. 147(a) be it noted and as the facts depict, there is no failure on the part of the assessee in furnishing the particulars pertaining to the abovenoted sum as not recoverable for the relevant accounting year and the statements filed along with the original return disclosed the full details of the aforesaid account. There is, therefore, no failure on the part of the assessee to disclose fully and truly the material facts necessary for the assessment year for the respective years and as such s. 147(a) has no manner of application and is not attracted in the facts of the matter under consideration. The High Court on consideration of the facts came to the conclusion that the Tribunal was justified in coming to the said finding and we also record our concurrence therewith.

6. Incidentally this issue came for consideration before this Court in a batch of cases on more or less identical situations and this Court while dealing with this matter finally, recorded that the question as regards reopening of the assessment under s. 147(a) of the Act would not arise further. The question in the facts of the matter under consideration is thus covered by the judgment of this Court in State Bank of Travancore vs. CIT (1986) 50 CTR (SC) 290 : (1986) 158 ITR 102 (SC) : TC 39R.795.

In that view of the matter, these appeals fail and are dismissed. No order as to costs.

[Citation : 254 ITR 791]

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